MEXICO CITY  American Apparel is set to launch a new basics apparel line to be made in Honduras and Nicaragua, vice president of communications Garry Bell told WWD, adding it will be 25 percent cheaper than the restructuring the brand’s key Made in the USA collection.

Canadian activewear maker Gildan acquired American Apparel for $88 million in a bankruptcy court auction in January. Since then it has been working to squeeze value out of the beleaguered Los Angeles-based brand, which is set to contribute up to $75 million of Gildan’s $2.7 billion in estimated sales this year.

As part of that process, Gildan began shifting production of the new “price-centric” line to Honduras and Nicaragua, where it makes the bulk of its 1.5 billion annual clothing units for global distribution.

“This is a new collection that will bring many of the Made in the USA styles to consumers at a lower price and leverage our American yarn, cotton and polyester fabrics that are turned into garments in Honduras and Nicaragua,” said Bell.

Both factories started making the off-price range in April, beginning with the printwear, or “decorated apparel,” Gildan sells to festivals or concert tours like Coachella or Farm Aid, which make up its wholesale business.

These include T-shirts, sweatshirts and spaghetti tanks for women, among other apparel, according to Bell.

Similar items will be made for American Apparel-branded garments in addition to more fashion T-shirts and knitwear, he added.

Bell emphasized the Made in the USA line will continue to be sewn in America, where Gildan just contracted four Southern California factories to make the clothing. He declined to identify the factories. That means roughly two-thirds of the brand will be produced in the U.S. and one-third in Central America, which is not expected to suffer from President Trump’s protectionist policies or duties that are more aimed at balancing a trade deficit with Mexico.

Gildan is also set to relaunch in midsummer, where the full expression of the new basics line will be on display, Bell said. The site will also help expand the revived American Apparel brand worldwide with online sales beginning in the U.S., then moving to Canada and eventually the U.K. before hitting key European markets, according to Bell.

For now, however, Gildan is more focused on growing its printwear business internationally. It sells such event-driven apparel in 55 countries.

“If all goes well, we should be selling American Apparel wholesale in more than 10 countries in three years,” Bell said, adding that Gildan is still mulling over whether to market the brand in the brick-and-mortar space.

At one point, American Apparel had stores throughout the U.S. and in major international markets like Canada, Germany, France and Mexico but all of those closed during its bankruptcy proceedings and legal battle between founder Dov Charney and hedge fund investors, which culminated in 2,400 layoffs in January.

“This brand has a very strong equity with core consumers and a big social-media following so undoubtedly there are many growth opportunities,” Bell concluded.

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